How to create a PayTo payment

PayTo is a modern digital payment system in Australia that allows businesses to initiate payments directly from a customer’s bank account with the customer’s explicit, real-time authorisation. It is designed to be a safer, faster, and more transparent alternative to traditional direct debits. PayTo enhances transaction speed and security using the same technology that underpins PayID.

PayTo enables a business to request permission from a customer to debit their bank account. Instead of signing a paper form or entering card details, the customer authorises the payment digitally through their banking app or online banking platform.

Once approved, payments can be processed instantly or on a scheduled basis, depending on the agreement.

As a merchant, you will send a PayTo agreement request to a customer. The customer will be notified by their bank about the pending PayTo agreement. Once the customer accepts the agreement, we will debit their account as per the agreed terms.

How PayTo Works Step by Step

1. Payment Agreement Is Created

A business sends a PayTo agreement request to the customer. This request includes:

• Business name
• Payment amount (fixed or variable)
• Frequency (one-off, recurring, or ad-hoc)
• Start date and expiry (if applicable)

2. Customer Reviews and Authorises

The customer receives the request in their banking app or internet banking. They can:

• Review all details in plain language
• Approve or decline the request
• Set limits or conditions (where supported)

No payments can occur without this explicit approval.

3. Payments Are Initiated

Once authorised, the business can initiate payments according to the agreed terms. Funds move directly from the customer’s bank account to the business—often in near real time.

4. Ongoing Control for Customers

Customers can manage PayTo agreements at any time through their bank, including:

• Pausing payments
• Changing limits
• Cancelling the agreement entirely

This level of control is a major improvement over traditional direct debits.

There are two types of agreements:

Single Payment

For a once off request for funds

This is for a one-time request for funds. Previously, debiting a bank account without proper authorization could lead to penalties for the merchant, resulting in chargebacks and significant losses. With PayTo, you can send an agreement request to the customer, and once they accept, the account is debited with protection against chargebacks in most scenarios.

Using Virtual Terminal:

1. Click create a Payment
2. Enter the payment amount and description
3. Select the PayTo icon.
4. Enter the customer's BSB and Account number or PayID.
5. The PayTo request is sent to the customer's bank.
6. The customer opens their banking app and locates the agreement to accept.
7. A pending acceptance screen is displayed on the merchant's screen while the customer accepts the PayTo agreement.
8. Once the PayTo is accepted, the account is debited.
9. A success icon is displayed on the payment screen.
10. The money is settled in your account the next day.

Using a Payment Request:

1. Click create a payment
2. Enter the payment amount and description.
3. Select "Payment Request" and send it to the customer.
4. The customer receives a link.
5. They click on the PayTo payment type, then enter their BSB and Account number or PayID.
6. The PayTo request is sent to the customer's bank.
7. The customer opens their banking app and locates the agreement to accept.
8. A pending acceptance screen is displayed on the payment request links screen while the customer accepts the PayTo agreement.
9. Once the PayTo is accepted, the account is debited.
10. A success message is shown to the customer once the process is completed.
11. The money is settled in your account the next day.

Recurring Payment

For a recurring payment

This is for ongoing payments. We are currently developing recurring PayTo agreements. These payments function similarly to Direct Debits but offer more protection against chargebacks because the customer has accepted the agreement through their banking portal.

Another advantage is that once the money is withdrawn from the account, it is guaranteed. Unlike traditional direct debits, which require three days to determine the outcome, PayTo provides immediate confirmation.

Customers can cancel the agreement from their bank account. However, it is important to note that canceling a PayTo agreement does not nullify a contract. If a direct debit contract is in place, the customer may be in breach of contract if they cancel the agreement.

How PayTo Is Different from Direct Debit

Benefits of PayTo

For Customers

• Greater transparency and control
• No need to share BSB and account numbers repeatedly
• Instant visibility of payment requests
• Easy cancellation through banking apps

For Businesses

• Faster access to funds
• Reduced payment failures
• Lower fraud risk
• Improved customer trust and experience

Is PayTo Secure?

Yes. PayTo uses the same high security standards as other NPP payments, including strong customer authentication by banks. Sensitive account details are not shared directly with businesses, reducing fraud and data exposure risks.